UN highlights global hunger fears

The UN estimate of 925 million undernourished people in 2010 is higher than before the 2008 economic crisis [EPA]

The UN's Food and Agriculture Organisation (FAO) has warned that rising prices of grain, meat and sugar are threatening nearly one billion poor people worldwide.

In a report on Tuesday, the FAO blamed the rising cost of food for the "unacceptably high" level of global hunger.

It estimates that 925 million people are undernourished in 2010, a decline from 1.023 billion in 2009 due to a more favourable economic environment, but still higher than before the 2008 economic crisis.

"The recent increase in food prices, if it persists, will create additional obstacles in the fight to further reduce hunger," the report said.

The UN agency said the number of hungry people had been rising for more than a decade, reaching a record high in 2009 triggered by the economic crisis and high domestic food prices in several developing countries.

Earlier this month, a 30 per cent rise in the price of bread - linked to soaring global wheat prices - was one of the triggers for the riots in Mozambique in which 13 people were killed.

Russia as one of the largest wheat producers in the world has been facing its worst drought and fires in more than a century, sparking a spike in global wheat prices.

Wheat prices rose to their highest level in about two years in August after Russia banned exports of the commodity while corn is continuing to climb, hitting the highest level in nearly two years on Tuesday.

But Jacques Diouf, the FAO director-general, played down the prospects for a repeat of the 2007/08 food crisis, pointing to a rise in global stocks of cereals after the two largest wheat crops in history in the last two years.

"We are advising governments to take into consideration the fundamentals of the markets, there are enough stocks, enough prospects for production," Diouf said, adding there was no reason to become alarmed or to start accelerating buying.

Maximo Torero, the division director of markets at the International Food Policy Research Institute, told Al Jazeera there is a direct connection between consumption and high prices but said the situation is different from the food price crisis two years ago.

"Poor people consume a significant amount of their basket of basic food, which leads to a significant increase in prices that immediately affects the consumption levels resulting in long-term effects on nutritional values.

'Smaller spike'

"What we are facing now is a smaller [price] spike on wheat because of the Russian crisis but it is very different to what happened in the 2007-2008, and that is the reason why FAO figures show a reduction of 100 million poor people because the prices are not at the level of 2007-2008."

Surging agricultural commodity prices in 2007/08 led to a sharp rise in the cost of basic food staples, sparking riots in several countries.

On Tuesday Cherkizovo, Russia's biggest meat producer, said a rise in meat prices this year "is unavoidable".

"We hope that the situation will be limited to 10-15 per cent ... by the end of the year," Sergei Mikhailov, Cherkizovo's chief executive officer, told the Reuters Russia Investment Summit.

Meanwhile, sugar prices are also on the rise, climbing to the highest levels in more than six months on Tuesday buoyed by worries drought will erode yields in Brazil, the world's top producer and exporter, into next season.

"Trade estimates for Brazilian sugar production are declining almost on a week-to-week basis," Doug Whitehead, an analyst with Rabobank, told Reuters news agency.

Analysts however see global supply prospects improving towards the end of the year.